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Crypto company shares are getting a boost from rising bitcoin prices and interim guidance that would exempt digital assets' paper gains from getting taxed.
Bitcoin treasury company Strategy said in a filing that it no longer expects to be subject to the 15% corporate alternative minimum tax it anticipated having to pay next year.
Crypto's numbers are going up. A boost from Washington is helping.
A range of digital assets were rising Thursday. The price of bitcoin (BTCUSD), which has been flirting with record highs, was recently above $120,000. Shares of companies with large digital holdings, including Coinbase (COIN) and Strategy (MSTR), were also rising—they were recently looking at double-digit weekly percentage gains—though part of the reason for that needs a bit of explanation.
The Treasury Department and Internal Revenue Service this week issued interim guidance saying paper profits and losses on digital assets were not subject to the 15% corporate alternative minimum tax, a bit of good news that came just as crypto markets pivoted from September-end doldrums. (Public companies would still need to pay taxes on cryptocurrency they sell.)
The government has delivered fresh tax guidance seen as beneficial to the crypto industry in its latest thinking about digital assets and what's known as the corporate alternative minimum tax, or CAMT. It's the latest sign that the Trump adminstration is pursuing policies viewed as beneficial to the industry.
The clarification around how digital assets would be taxed is especially helpful to Strategy, which has the largest bitcoin stockpile of all publicly traded companies, and Coinbase, which ranks in the top 10. Strategy said it no longer expects to be subject to the CAMT tax, which it anticipated having to pay in 2026 after seeing gargantuan paper gains on its bitcoins, of which it has more than 640,000, according to a recent filing.
This has to do with the Financial Accounting Standards Board, which changed accounting and disclosure requirements for cryptocurrencies in December 2023, saying companies should measure them at fair value, with changes recorded in net income for each reporting period. That allowed companies like Strategy to start reporting paper gains on their bitcoin every quarter, but also made them subject to CAMT.
Strategy and Coinbase in May asked that the IRS exempt digital assets, saying it could force some companies to sell assets just to pay the tax and complaining that their being subject to CAMT was "the unintended result of basing tax liability on decisions by a private organization that is focused on financial statement accounting standards, not principles of taxation."
Another recent bullish signal from the crypto industry came from derivatives marketplace operator CME Group (CME), which said it would offer 24/7 trading on crypto futures and options starting early next year.
